The Sony Alpha NEX-5 is one of the most impressive, exciting and enjoyable cameras we've used for a long time. Equally it could be one of the most frustrating too, but during day-to-day use, we found the positive aspects far out-weighed the downsides. That's the bottom line, so what about the specifics? (Note we tested a NEX-5 updated to firmware version 2).

The NEX cameras are primarily about squeezing DSLR quality into compact bodies. They achieve this by employing a DSLR-sized sensor, but dispensing with the traditional mirror and optical viewfinder and using their screens as the sole means of composition. This is the exact same strategy pioneered by the Micro Four Thirds standard one year earlier, but what makes Sony's NEX system more impressive is how an even larger sensor has been squeezed into an even smaller body without any compromise in handling.

It's hard to get a perspective from photos, but in the flesh, the NEX-3 and NEX-5 really are very small cameras. Place them side-by-side with the Panasonic GF1 or Olympus PEN cameras, and the Sony's are noticeably smaller. Given the NEX bodies feature a sensor that's over 50% larger in surface area, not to mention a big tilting screen, it's an impressive achievement in miniaturisation.

Small bodies don't necessarily translate into ones which are particularly ergonomic, but by inheriting the shape of Sony's classic F-series Cyber-shots, the NEX kits are surprisingly comfortable to hold and use. Rather than position the lens mount roughly in the middle of the body, it's pressed up against one side, giving the camera and lens an L shape when viewed from above. You subsequently can't help but rest the lens barrel in your left hand while your right holds the generous grip. The resulting hold is both comfortable and very secure, which are not words you'd normally associate with such a small body.

The large, high resolution screen further enhances handling by tilting vertically to allow easy shooting at low angles, waist-height or held high overhead. It may not flip to the sides, but provides greater compositional flexibility than the competition.

The decent handling continues as you use the camera. Our test sample started in around one second, focused swiftly in all but the dimmest conditions, and responded quickly to a press of the shutter release. There's full manual control over exposures, but if you fancy an easier life, the Intelligent Auto mode did a great job at recognising situations and not just choosing an appropriate scene preset, but also presenting a series of relevant tips to go with it. Indeed the Shooting Tips are a triumph on the NEX, with no fewer than 85 pages of well-written and well-presented help.

The standard continuous shooting mode may be fairly average, but we measured the optional Speed Priority mode exceeding 6fps. The focus and exposure may be locked at the first shot in Speed Priority mode, but for subjects which remain at around the same distance with roughly the same lighting, it's a powerful tool, and again one which surpasses rivals. We used it to successfully shoot Jetboats performing stunts at high speed, and while the optical viewfinder of a DSLR is ultimately preferred for shooting and tracking action, the response and speed of the NEX cameras makes them quite usable for fast action photography.

The NEX's large sensor promises DSLR quality, and certainly delivered impressive results in our low light tests. Our NEX-5 sample comfortably out-performed the Olympus E-P2 beyond 400 ISO and even managed to edge ahead of the Nikon D90 at higher sensitivities. Many of our results at 800 and 1600 ISO looked very good, with serious artefacts only really coming in at 3200 ISO and above. See our Sony NEX High ISO results page for a full report, and keep reading for details on the camera's unique exposure modes which can improve its low light performance even further.

To keep costs and weight down, Sony could have supplied the NEX cameras with cheap plastic kit lenses, but instead opted to deliver classy, metal-bodied lenses with surprisingly good performance and quiet focusing. We used the 18-55mm kit lens for all of our tests and found it to be a respectable performer. If you fancy something more exotic though, the short lens to sensor distance (like Micro Four Thirds) already supports a wide variety of adapters for different lens systems.

The movie mode on the NEX-5 also produced some good looking footage and had a decent stab at autofocusing while filming. It may have stumbled at times, but was certainly much easier than manually focusing a typical DSLR while filming. The absence of manual exposure controls certainly restricts what's possible, but we still managed to enjoy cleaner results in low light and shallower depth-of-field effects compared to cameras with small sensors. It may not be as foolproof as a dedicated camcorder, but delivers excellent results for a still camera, and once again we have a full report with samples in our Sony Alpha NEX Movie Mode page.

So a small but comfortable body with excellent image quality, a respectable kit lens, decent HD video and fast handling – that would be more than sufficient to sell the NEX bodies to many photographers, but they have additional tricks up their sleeves. The NEX cameras inherit the innovative shooting modes of recent high-end Cyber-shots which exploit fast continuous shooting to stack or stitch multiple images for special effects.

The Handheld Twilight and Anti Motion Blur modes both capture and assemble six images in an attempt to reduce noise or movement in low light. Like the Cyber-shots which preceded them, these modes really do work and can deliver excellent results – the big difference here being their application to a sensor which already boasts low noise.

We've dedicated pages to their results, but as a brief taster, HHT can deliver very clean and detailed images at 1600 ISO which are the envy of rival cameras. See our Sony Alpha NEX HHT and Sony Alpha NEX AMB results pages for a full report.

That's not all: the NEX cameras make up for basic bracketing with a built-in High Dynamic Range (HDR) mode which combines three different exposures up to 6EV apart. Once again this happily works with the camera handheld with the final image assembled in-camera within seconds. Keep the settings subtle and you can successfully preserve highlight and shadow detail while maintaining a natural result.

The NEX cameras also inherit the Sweep Panorama mode of recent Cyber-shots, where the camera fires-off a burst of shots while you pan the camera from one side to the other – again all handheld. Seconds later the NEX has assembled a panoramic image with pretty successful stitching. In our tests the perspective of lenses with longer actual focal lengths may have presented more parallax issues for the NEX than the Cyber-shots with greater stitching errors as a consequence, but keep the lens wide and the subject distant and you can still enjoy excellent results.

Sony Alpha NEX-5 Sweep Panorama samples

Both images taken with 18-55mm at 18mm (27mm equivalent)

At this point it almost seems like showing-off when Sony releases a firmware update which equips the NEX cameras with a 3D Panorama option, but they really did and it really does work. In our tests the best effect was achieved with subjects no closer than a meter or so, and at no point did the images jump out from a 3D TV – instead they appeared behind the screen. So while you're not going to achieve the effect of a decent 3D Blu ray or theatrical movie, the fact it works at all on a single lens camera is impressive in itself. It's a fun extra to have at your disposal. See our Sony Alpha NEX 3D Panorama section for more details.

Many traditional photographers may view these additional modes as novelties or gadgets, but the fun of 3D aside, the other modes really do give the NEX cameras a unique and valuable edge over the competition. The HDR and Sweep Panorama modes render meticulous tripod based shooting and post-processing tasks into results which can be casually enjoyed by anyone in seconds. The Handheld Twilight mode is arguably the most impressive of all, employing image stacking techniques pioneered by astro-photographers to deliver very low noise results at high sensitivities, again without any hassle.

In our view these are game-changing facilities. They show Sony really thinking about addressing issues of digital photography and exploiting the available technology to resolve them. A camera with quick continuous shooting is always welcome, but which other manufacturer would make the leap to exploit it with automatic HDR and Panorama modes, let alone settings which effectively reduce noise levels without compromising detail?

By now you'll know we were very impressed with the Sony NEX cameras, but of course there are a number of downsides including some which for certain photographers will be deal-breakers.

We'll start with the screen. Yes it's large, high resolution and tilts vertically, but in bright, direct sunlight it can really suffer with the image virtually disappearing. Tilting the screen can sometimes help, but at other times it can feel like you're shooting blind without anything to fall back on. Admittedly this is only a serious issue if you shoot in very stark daylight conditions, but it's worth knowing.

Next up comes face detection which in our tests frequently failed to recognise and lock-onto both adult and infant faces. We suspect the problem might have been due to the face detection system working best with subjects which are already fairly sharp. The shallower depth-of-field of the NEX compared to a typical compact though meant its AF system often had to start with a blurrier image, and this could be what's tripping it up. Either way it proved frustrating because portraits taken with the standard multi-AF system (the default when face detection isn't triggered) weren't always as sharp as those when face detection had successfully locked-on.

Moving on, the movie mode is capable of capturing good-looking footage, but much of the advantage of the large NEX sensor is lost due to the lack of any manual exposure controls. You can't set the gain in low light, and there's no way to control the depth-of-field either. While we did manage to achieve fairly clean results in low light and selectively focus between subjects at very close range, it's no substitute for a movie mode which provides full manual control. So the NEX-3 and NEX-5 movie modes feel hobbled (presumably to protect the NEX-VG10), and videophiles have to either fit manual lenses using adapter or pray someone produces a firmware update which unlocks the camera's full potential. We could also complain there's no standard microphone jack, but at least Sony does offer an external microphone option. Note Sony has promised control over the aperture in movies in a firmware update expected in mid-October 2010.

Then there's those unique shooting modes described above. Sony was so proud of them on the earlier Cyber-shot HX5 that each one enjoyed prominent and easy access on the main mode dial, but on the NEX, they're not all as easy to find. Anti Motion Blur and the two Panorama modes may still enjoy pride of place on the (virtual) mode dial, but Handheld Twilight mode is hidden in a scene preset, while HDR is buried away with the Dynamic Range Optimiser settings in the menu system. Very odd and not particularly intuitive.

This brings us onto the thorniest issue of all: the NEX user interface. Sony describes it as elegant and uncluttered featuring a new ‘never get lost’ menu, but like many reviewers, we found it incredibly frustrating at times.

In a brave attempt to keep things simple for the target market, Sony's minimised the number of controls on the NEX bodies and hidden away many of the settings under various menus. That in itself is not a bad thing, especially for a camera aimed at those upgrading from a point-and-shoot model, but the NEX implementation can be infuriatingly slow and inconsistent for enthusiasts.

Most cameras, including Sony's own Cyber-shot compacts, solve the problem of minimal controls by offering some kind of super-imposed function menu. These generally present quick and easy access to things like the image quality, sensitivity, white balance and AF options. But bizarrely you won't find such a system on the NEX-3 and NEX-5, at least on the firmware tested.

Instead you're forced to enter the main menu system to change almost any setting. We're not that bothered about the virtual mode dial, as it saves space on the body and prevents accidental turning, but the number of button presses to adjust settings like the sensitivity, white balance and AF modes can become seriously frustrating. What really makes it bad is after pressing numerous buttons to access a setting, you're thrown back to the main shooting screen to adjust it. Confirm your choice and the menu disappears, forcing you to press all the buttons again if you made a mistake or want to change anything else.

As such when presented with one of the rare menus where options are selected from sub-menus, like Image Size, you'll understandably feel the desire to set several at once to save time. But the NEX user interface annoyingly greys-out options it doesn't think are relevant at the time, so while Image Size is where you'll find the panorama quality settings, you can't actually change them unless you're in the panorama mode; even the 3D Panorama size can't be changed in the Sweep Panorama mode and vice versa.

Sometimes it's less obvious why an option is greyed-out at all. Once you've finally found HDR hidden away in the DRO menu, you may be surprised to find it unavailable. The reason is probably that you have the camera set to RAW or RAW plus JPEG, which isn't supported by the HDR mode. But rather than explaining this, or temporarily disabling RAW recording, the HDR option just sits there, greyed-out and not budging. There's also some daft decisions like hiding the live histogram when adjusting exposure compensation, which is exactly when you need it.

All in all, there's a great many aspects to the NEX user interface which at best will have you scratching your head and at worst gnashing your teeth with fury. We appreciate the need to keep things simple for beginners, but the cameras could have been so much better with an optional advanced mode, a super-imposed function menu, or customised softkeys. Indeed for some, the user interface will be a deal-breaker, but it's important to step back from the reviews for a moment and think about how the cameras operate in more typical environments.

The NEX user interface will infuriate anyone who needs to regularly change lots of settings – such as a camera reviewer when conducting tests. Indeed at times it feels almost custom-built to annoy camera testers. But if you don't change your settings that often, it's really not that big an issue.

Indeed during normal use, we tended to leave the NEX-5 either set to Intelligent Auto or Aperture Priority. In the former, the camera did pretty much everything by itself, and in the latter, the f-number was always easily adjustable. We of course understand different photographers have different needs, but in general use, how often would you honestly adjust the sensitivity, white balance, AF modes and image quality? Every minute? Maybe every hour? Perhaps not even every day. Many photographers might set the camera up, before leaving the settings mostly untouched for general use, in which case the laborious user interface becomes a minor issue. A dip in and back out again to change one or two settings is quite tolerable, and again during normal use (ie, not as a camera reviewer) we found the interface rarely became a problem.

Only you can decide if it's going to be an issue, but after all the negative press, you may be surprised to find it much less of a problem than anticipated. And even if you are the type of photographer who regularly changes lots of settings, you may be willing to accept the NEX interface in return for the camera's benefits.

It's also important to note it's not all bad either. The context sensitive shooting tips are class-leading, and the beginner-friendly aperture control in Auto, presented as a Background Defocus scale, works well, despite risking camera-shake and diffraction at the 'crisp' end. Note: Sonly has promised customisable controls in a firmware update expected in October 2010 which should greatly improve the user interface.

So before our final verdict, how do the NEX cameras compare to their closest rivals? We're going to use the higher-end NEX-5 as the model to compare the others to, so will start by seeing how it measures-up against the more affordable NEX-3.

Compared to Sony Alpha NEX-3

The Sony Alpha NEX-3 shares a great deal in common with the NEX-5 – indeed it's easier to state what's different, rather than what's the same. Most obviously the NEX-3 has a plastic rather than magnesium alloy body, which is slightly larger and a tad heavier. The grip doesn't protrude as much as the NEX-5, but it is wider, almost as if turned by 90 degrees. Sticking with the exterior, the NEX-3 is also missing the infra-red port which works with the optional wireless remote control.

Under the hood, the only difference is the video quality and recording format. The NEX-3 has a top quality setting of 1280x720 (720p) and employs MP4 encoding, whereas the NEX-5 offers a higher resolution 1920x1080 (1080i) mode which is encoded using AVCHD; note the NEX-5 also offers lower resolution modes encoded with MP4, but not at 720p.

So that's it: the movie mode is lower resolution (but still HD), there's no support for the optional IR remote control, and the body is slightly larger, heavier and made from plastic. Make those 'sacrifices' and you'll save up to 20% over the NEX-5, while still enjoying the same sensor, excellent image quality, innovative modes, tilting screen and quality kit lens. Don't let the plastic construction put you off either, as the build quality of the NEX-3 remains high and those with larger hands may actually prefer the wider grip.

As such, the NEX-3 represents a bargain for those who don't need the 1080i video and remote control of the NEX-5, and who can live without its magnesium alloy body – or of course actually prefer the shape of the cheaper model. And for roughly the same price of the NEX-5 18-55mm kit, you can get the NEX-3 in a twin lens kit with the 18-55mm and 16mm pancake.

Compared to Olympus E-PL1

The Olympus E-PL1 is the company's third model to employ the Micro Four Thirds standard, and designed as a compact model aimed at those upgrading from point-and-shoot cameras. As such it's the major rival for the Sony Alpha NEX cameras. Both the Olympus and Sony models share the same concept of housing a DSLR sensor and removeable lens mount in a relatively compact mirrorless body, but there are considerable differences in their implementations.

In their favour, the NEX cameras are smaller and lighter while boasting larger and more detailed screens which can tilt vertically. Despite boasting smaller bodies, the NEX cameras squeeze in a larger sensor with over 50% greater surface area, which in our tests delivered lower noise levels beyond 400 ISO. The Sony cameras also boast much faster continuous shooting if you're willing to have the focus and exposure locked at the first frame – and this capability is cleverly exploited in a number of innovative shooting modes which stack multiple images to reduce noise or motion in low light, generate in-camera HDR images, or stitch panoramas including ones in 3D. And if you're comparing the NEX-5, the HD video is in 1080i rather than 720p.

That's a considerable amount in favour of the NEX cameras, especially considering the NEX-3 costs roughly the same as the E-PL1, but it's not a one-horse race. The E-PL1 may be the simplest in the Olympus PEN range, but still features quicker and easier access to settings than the NEX cameras, along with greater customisation within the menus. The screen may be smaller and lower resolution, not to mention fixed in position, but it's much more visible under harsh direct sunlight. The E-PL1 body may be larger than the NEX, but features a fully-functional flash hotshoe in addition to an accessory port, which already supports an optional electronic viewfinder and standard microphone input. Some may also prefer that the flash is built-in rather than screwed-on.

Most importantly of all, the E-PL1 boasts built-in stabilisation which works with any lens you attach, including exotic models via an adapter. In contrast the NEX cameras rely on optical stabilisation, which at launch was only built-into two out of three lenses. The NEX system may also support exotic lenses via adapters, but doesn't allow autofocus even with Sony's own full sized Alpha lenses. There's also the fact the Micro Four Thirds system has more lenses at the time of writing, thanks to being a year older; the collection also includes a desirable 40mm equivalent f1.7 pancake prime lens which many will find more practical than the 24mm equivalent f2.8 model initially offered by Sony.

Ultimately the NEX cameras may be smaller and lighter while boasting better quality at high sensitivities, but the built-in stabilisation, flash hotshoe and easier access to settings, not to mention better support for other lenses, will see the E-PL1 preferred by many enthusiasts.

Compared to Panasonic Lumix DMC-GF1

Panasonic has produced a number of cameras based on the Micro Four Thirds standard, but at the time of writing, the only 'pocket-sized' model remained the Lumix GF1. Again, like the Olympus PEN models, the Lumix GF1 shares the same concept of housing a DSLR sensor and removeable lens mount in a relatively compact mirror-less body, but there are considerable differences in their implementations.

In their favour, the NEX cameras are again smaller and lighter while boasting larger and more detailed screens which can tilt vertically. Despite boasting smaller bodies, the NEX cameras squeeze in a larger sensor with over 50% greater surface area, which in our tests delivered lower noise levels beyond 400 ISO. The Sony cameras also boast much faster continuous shooting if you're willing to have the focus and exposure locked at the first frame – and this capability is cleverly exploited in a number of innovative shooting modes which stack multiple images to reduce noise or motion in low light, generate in-camera HDR images, or stitch panoramas including ones in 3D. And if you're comparing the NEX-5, the HD video is in 1080i rather than 720p.

Since the Panasonic GF1 also relies on optically stabilised lenses, its major advantage over the NEX cameras is a control system and user interface which allows enthusiasts to get at the settings they want quickly and easily. Like the E-PL1, the Lumix GF1 also features a built-in flash which you don't need to screw-on, and a fully-featured flash hotshoe. The GF1 also supports an optional electronic viewfinder.

Enthusiasts will additionally appreciate the wider support for different lenses, both in and out of the Micro Four Thirds system – and the latter includes a very desirable 40mm equivalent f1.7 pancake prime lens which many will find more practical than the 24mm equivalent f2.8 model initially offered by Sony.

Ultimately the decision between the GF1 and NEX cameras is much the same as the Olympus PEN models. The Lumix GF1 better caters for enthusiasts with greater controls, a more sensible user interface, flash hotshoe, and better established lens collection. So if all of that is important to you, you're once again left weighing-up the Panasonic against the Olympus systems. See our Panasonic Lumix DMC-GF1 review for more details.

Sony Alpha NEX-3 / NEX-5 final verdict

Sony's Alpha NEX-3 and NEX-5 are remarkable cameras. They take the concept pioneered by Micro Four Thirds of packing a DSLR-sized sensor into a compact mirrorless body, but employ a bigger sensor and a smaller shell. The larger sensor really does deliver better results at high sensitivities, while the unique L-shaped design ensures a comfortable and secure grip despite the compact dimensions.

Throw-in fast continuous shooting, a large, detailed and vertically articulated screen, HD video with a decent stab at autofocusing while filming, a respectable kit lens and a series of innovative modes which do everything from reducing noise in low light to generating 3D panoramas, and you've got a pretty impressive package.

Probably the most remarkable thing about the Sony NEX cameras though is how their misjudged user interface has soured the deal for so many people. We've gone into detail above and in the main review, so will keep it brief here: yes, the NEX user interface forces you through way more hoops than is strictly necessary to change common settings, but it may not be as big an issue as you think in practice.

Sure if you regularly change lots of settings, or are a camera tester, then you'll find the current NEX interface infuriating. But if you tend to setup your camera and only make minor adjustments during general use, the interface won't be a major problem. Don't get us wrong: there were frequent occasions during testing when we cursed the NEX interface, and anyone willing to improve it with a firmware update will make many friends. But as soon as we stopped testing and started using the camera for normal photography the laborious interface became a minor issue.

After using the NEX-5 for several weeks, the biggest issue we see with it is actually the target audience. Sony says it's aimed at those upgrading from point-and-shoot cameras, and the combination of an excellent auto mode with well-written context-sensitive tips will certainly appeal. But the shallow depth of field of a camera with a larger sensor and longer focal length lenses than a typical compact can result in more focusing errors.

We shot with the NEX-5 alongside the Canon IXUS 300 HS / SD4000 IS, and the latter was simply more confident and consistent when shooting people. When face detection locked-on with the NEX, the results were fantastic, but we found many occasions when it failed to work, leaving a moment missed or a shot slightly out-of-focus. The large sensor is also a double edged-sword: it may deliver low noise at high sensitivities and allow shallow depth-of-field effects, but equally the latter can result in more focusing errors than a conventional compact. We should additionally note when asking many point-and-shoot owners what they didn't like about their existing camera, few if any complained about high noise or the inability to achieve blurred backgrounds on portraits; they tended to want longer zooms or more reliable focusing and exposures.

The type of people who do want lower noise and shallow depth-of-field effects tend to be those who also want easy means by which to adjust settings. The NEX cameras are packed with so much technology and promise, yet hobble much of it by making it hard to change settings. The video mode, while capable of delivering good quality, also fails to fully exploit the benefits of a large sensor with no means to control the gain or depth-of-field.

Viewed that way, the NEX cameras fail to deliver a truly satisfying experience for either beginners or enthusiasts, and yet we can't help but still love them. There's simply so much that Sony's got right with these cameras, so much that's way ahead of the competition, that we find ourselves willing to accept the user interface and embrace what makes them special. It would be easy for us to subsequently award them our Recommended rating and say there's room for improvement, but we strongly believe there's sufficient that's game-changing here to justify our Highly Recommended award.

More so than ever before, this rating comes with caveats. Read our full review. Understand the limitations of the interface and focusing system. Better still, try it for yourself. You may find the interface really disagrees with you, in which case consider the Micro Four Thirds models or alternatives from the likes of Samsung. But if the user interface is a non-issue or something you're willing to work with, we can whole-heartedly recommend the NEX-3 and NEX-5 to enthusiasts, along with beginners who also understand that shallow depth-of-field is both a plus and a negative over a conventional compact.

Sony's thrown down the gauntlet and shown what's possible with a large-sensor compact. Just imagine if the user interface gets a workover in a future firmware update...

Update: At Photokina in September 2010, Sony announced a firmware update for the NEX-3 and NEX-5. Expected in mid-October 2010, this update offers the following: "Autofocus operation is now supported when using A-mount SAM and SSM lenses with the optional LA-EA1 Mount Adaptor (upgrade for NEX-VG10 is available from mid-November). There’s also a new custom function that allows assignment to buttons of frequently-used functions, plus a new function to record movies with setup aperture". This is great news and shows Sony responding to the concerns of reviews and existing owners. We hope to retest the NEX cameras with this firmware in the future and will update the review at that time.